) -- TheStreet.com's stock-rating model upgraded drugmaker
: Third-quarter profit increased 22% to $2.1 billion, or $1.46 a share, as revenue grew 4% to $8.3 billion. AstraZeneca's gross margin rose from 88% to 91%, and its operating margin climbed from 33% to 40%. AstraZeneca possesses adequate liquidity, having more than doubled its cash balance to $7.8 billion since the year-earlier quarter. Its 0.6 debt-to-equity ratio indicates reasonable leverage. Over the past three years, AstraZeneca has grown revenue 8% annually, on average.
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: AstraZeneca has risen 12% this year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 9, a discount to the market and pharmaceutical peers. The shares have a 2.6% dividend yield.
The model downgraded
, a biotech company focused on cancer therapies, to "hold."
: Third-quarter profit soared 58% to $217 million, or 46 cents a share, as revenue climbed 18% to $692 million. Celgene's gross margin widened from 91% to 94%, and its operating margin expanded from 28% to 34%. The company has an ideal financial position, with $2.8 billion of cash and no debt. We give Celgene a financial strength score of 9.4 out of 10, higher than the "buy"-list average. However, its stock receives a performance score of just 3.9 out of 10 due to recent underperformance.
: Celgene has fallen 2% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 67, elevated by a loss in last year's fourth-quarter. Celgene doesn't pay dividends.
The model downgraded supermarket operator
: The company swung to a third-quarter loss of $875 million, or $1.35 a share, from a profit of $237 million, or 36 cents a share, in the year-earlier period. Revenue grew marginally to $18 billion. Kroger's gross margin remained steady at 23%, and its operating margin declined from 3% to 2%. Its quick ratio of 0.3 indicates poor liquidity, but Kroger's cash balance has grown 33% since the year-earlier quarter. Kroger's 1.7 debt-to-equity ratio is higher-than-ideal.
: Kroger has dropped 25% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 87, elevated by the recent quarterly loss. The shares have a 1.9% dividend yield.
The model upgraded metals and mining company
: Third-quarter profit plummeted 66% to $1.9 billion, or 37 cents a share, as revenue increased 20% to $8.7 billion. Vale's gross margin narrowed from 66% to 57%, and its operating margin fell from 49% to 34%. Vale holds $13 billion of cash, translating to an adequate quick ratio of 1.8. Its 0.4 debt-to-equity ratio is less than the industry average, indicating conservative leverage. Vale's shares have rallied 35% over the past three months. The stock receives a performance score of 7.3 out of 10 from our model.
: Vale has gained 59% this year, more than major U.S. indices. The stock trades at a price-to-earnings ratio of 43, elevated by a loss in last year's fourth-quarter. The shares have a 1.6% dividend yield.
-- Reported by Jake Lynch in Boston.